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Big Plans for Yahoo Screen

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Yahoo! Inc. seems to be doing all that is required to make it big in the online video content space. After several company acquisitions under its belt, Yahoo! now wants to acquire high-quality original video programming. Reportedly, Yahoo! has nearly sealed four original online half-hour comedy series, comprising 10 episodes each. The budget for each episode is estimated to be in the range of $700,000 to $1 million.

These series will be similar to the ones showcased on cable TV channels like HBO and online streaming services like Hulu, Netflix (NFLX - Free Report) and Amazon (AMZN - Free Report) . Writers and directors with TV experience will be appointed to create the series, which is expected to be unveiled to advertisers by the end of April. The series will be streamed through Yahoo Screen, Yahoo!’s video streaming service. Users can view the content on Apple’s (AAPL - Free Report) iOS apps as well as web browsers.

While Yahoo! already offers other shows like Saturday Night Live, it remains interested in original content. This looks like an expensive experiment, but Yahoo is not alone in this; others like Microsoft (MSFT) and Sony (SNE - Free Report) have similar plans.  

Video content could help move traffic to Yahoo sites, thereby encouraging advertisers to serve more ads. This in turn would help ad views and help monetization. However, even if Yahoo!’s plans materialize, it will have to face a lot of trouble to make them successful.

Yahoo Screen still has a long way to go in order to compete with the likes of Amazon and Netflix, which do more than just streaming online video-content. Additionally, to become a true preference over conventional TV programming could be a challenge.

Yahoo! is also set to acquire News Distribution Network (“NDN”), a web video platform for around $300 million. This along with an infusion of Google’s YouTube employees is expected to help it build its own video platform. Only time will tell if Yahoo’s execution is good enough to achieve the desired results.

Yahoo! currently carries a Zacks Rank # 3 (Hold).

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